Demand for Mortgages Rises, Despite Increasing Rates

Demand for Mortgages Rises, , Despite Increasing Rates.

Last week, mortgage rates continued to climb higher in the United States.

NBC reports that the increase has not impacted mortgage demand, as buyers continue to seek newly-built homes.

According to the Mortgage Bankers Association's seasonally adjusted index, total volume for mortgage applications rose 3% compared to the week prior.

Year over year, total applications are still down 21%.

However, NBC reports that applications have increased for three consecutive weeks to reach the highest level since May, despite rising rates.

New home sales have been driving purchase activity in recent months as buyers look for options beyond the existing-home market, Joel Kan, MBA’s vice president and deputy chief economist, via NBC.

Existing-home sales continued to be held back by a lack of for-sale inventory as many potential sellers are holding on to their lower-rate mortgages, Joel Kan, MBA’s vice president and deputy chief economist, via NBC.

In May, sales of newly-built homes rose by 12% compared to April and were 20% higher than a year before.

Meanwhile, applications to refinance a home loan increased by 3% for the week but still came in 32% lower than in 2022.